Ecological Infrastructure for Water Security Project: Investing In Catchment Management to Build Water Security
Investing in water catchments offers a cost-effective means of enhancing water security. South Africa is a water scarce country, prone to drought and vulnerable to climate change.
Investing in water catchments offers a cost-effective means of enhancing water security. South Africa is a water scarce country, prone to drought and vulnerable to climate change. Despite this, mobilising investment to rehabilitate and maintain water catchments has proven difficult. The deteriorating state of South Africa’s water catchments represents a growing risk to socio-economic progress. Timely investment in catchment stewardship prevents the need to support more expensive emergency measures.
The Ecological Infrastructure for Water Security Project is financed through a Global Environmental Facility (GEF) grant of USD7.2 million (2018 to 2023), with the DBSA managing the project funds and the South African National Biodiversity Institute (SANBI) acting as the implementing agent. Contracted project implementation partners include the World Wide Fund
for Nature (WWF), the Water Research Commission (WRC), and the National Business Initiative (NBI). The project addresses the development of supportive policies, institutional structures and financing instruments to mobilise sustained investment in ecological infrastructure to improve water security. The project is implemented through three work programmes which aim to:
- Create an enabling environment by integrating ecosystem services into the water value chain through natural capital accounts, supportive policies and financing mechanisms
Strengthen implementation capacity and an evidence base in two strategic water catchments critical to water security, namely:
1. The Berg and Breede catchments in the Western Cape, which provide water to Cape Town and the surrounding high value agricultural areas
2. The Greater uMngeni catchment in KwaZulu-Natal, which supplies water to eThekwini and the Midlands.- Share the knowledge generated through the project with stakeholders to mobilise action
The project outlines a ‘roadmap’ of identified opportunities and interventions for the public and private sectors to enhance investment in ecological infrastructure and improve water security. All socio-economic progress rests on a sustained supply of clean water. Ecological infrastructure refers to naturally functioning ecosystems (healthy catchments, rivers, wetlands and Strategic Water Source Areas) that generate and deliver services to people. These ecological infrastructure assets contribute to water security by sustaining the supply of water, improving water quality flowing into dams and generating and delivering valuable services to people and local economies. Investing in ecological infrastructure plays a critical role in:
- Protecting the value of built infrastructure which is dependent on healthy ecological infrastructure. Investing in ecosystems can save money in the construction and maintenance of conventional infrastructure through addressing possible physical and financial risks to infrastructure investment and improving on environmental, social and governance (ESG) considerations in the credit life cycle of investments.
- Creating opportunities to support the transition to a green economy and the achievement of the SDGs by supporting sustainable land use management practices, job creation, enhancing water and food security, improving resource efficiency and sustainability, enhancing equitable access to resources, and resilience to climate change
The project focuses both on private and public sector financial flows to catchment management. South African water legislation places the primary responsibility for integrated water resource management with public sector entities and outlines public finance mechanisms to raise funds for catchment management. The project team is working with public water entities to identify priority catchments for water security and to use water prices to mobilise investment in these catchments. Recommendations are being developed to improve financial resource mobilisation to rehabilitate and maintain water catchments. The project engages with the private sector to support the upscaling of investments in healthy water catchments. This investment environment is influenced by accurate water pricing that reflects the scarcity value of water, precedents that demonstrate the additional water yielded when alien invasive plants are cleared from catchments; the ability for healthy catchments to delay dam siltation; and the nature of improvements to water quality when wetlands and riparian zones are restored. The potential to develop a ‘water bond’ as an add-on to conventional water infrastructure finance, based on ‘returns’ on investment in healthy water catchments is being explored with banks and fund managers.
The roadmap outlines a role for private sector finance and institutional investors to support the transition to water efficiency that will be necessitated as water prices increase. It also identifies the need to blend different sources of finance in, and funding for, healthy water catchments. The need for blended finance solutions to support both water security in catchments and local post-lockdown economic recovery and job creation is acute. Medium term capacity to blend multiple strands of investment that enhance the role of water catchments in ensuring water security will prove critical to counter the growing pressures placed on South Africa’s water resource by urbanisation and climate change.
The Berg and Breede catchments in the Western Cape and the Greater uMngeni catchment in KwaZulu-Natal
Successfully ramping up its customer base from 0 to over 1 200 households in less than six months in 2020. On its way to reaching more than 3 000 subscribing households by September 2021
Share the knowledge generated through the project with stakeholders to mobilise action
Creating opportunities to support the transition to a green economy and the achievement of the SDGs by supporting sustainable land use management practices, job creation, enhancing water and food security, improving resource efficiency and sustainability, enhancing equitable access to resources, and resilience to climate change